BusinessDay 26 Feb 2018

BUSINESS DAY
Insight
FDC Bi-Monthly update
Nigeria Macroeconomic Indicators
POWER SECTOR
Power output
on February
14th was
4,138MWh/h,
increasing by
36.88% from 3,023MWh/h
on February 1st. Average
power output from the national
grid was 3,918MWh/h
between February 1st – February
14th. Increased output
was largely due to reduced
gas constraints.
NEWS YOU CAN TRUST I MONDAY 26 FEBRUARY 2018 C002D5556
fivethings
for your new week
Fascinating business facts
27.8m
Google Play apps and games store has started accepting
payments through Kenya’s highly successful mobile
money service M-Pesa in a market where many
people do not have a credit card. M-Pesa, which
enables Kenyans to transfer money and pay bills via
mobile phone, has 27.8 million users in the nation of
45 million people where Google’s Android platform
dominates. Safariom started M-Pesa in 2007, offering
money transfer services between users.
MONEY MARKET
Average opening position
of the interbank market was
N111.02bn long between
February 1st -15th compared
to N284.08bn long in the
corresponding period in
January. The DMO issued a
sum of N176bn in T/bills in
the first auction of February
com- pared to the first auction
in January of N161.55bn
. The stop rates for the 182
and 364 - day tenors were
unchanged at 13.65% pa and
13.7% pa while the 91-day
tenor declined further to
11.95% pa from the last auction
conducted in January.
In the secondary market, T/
bills yields for the 182-day
tenor remained unchanged
while it declined for the 91-
day and 364-day tenors during
the review period. The
91-day, 182-day and 364-day
closed at 12.38%, 14.58% and
13.55% from 13.12%, 13.42%
and 13.75% on February 1st
respectively.
Average NIBOR (OBB,
O/N) was 24.17% pa during
the re- view period, compared
to 11.05% pa in the
corresponding period in
January. Short term interest
rates reached a high of over
50%, due to reduced market
liquidity before retreating
to close at 6.80% on February
15th (average OBB/
ON). The total OMO sales
in the first half of February
was N249.5bn compared to
N344.48bn sold in the corresponding
period in January.
FOREX MARKET
Exchange Rate
The naira appreciated marginally
by 0.27% at the parallel
market to close at N363/$
between February 1st –February
15th. The IEFX rate
appreciated marginally by
0.12% to N360.13/$ from
N360.57. Total turnover during
the review period at the
IEFX window was $2.01bn
com- pared to $2.14bn in
the corresponding period
in January. Year to date, a
total of $8.04bn has been
sold as at February 15th. The
IFEM rate traded within a
tight band of N305.8/$ and
N305.9/$.
EXTERNAL RESERVES
External reserves hit $41.47bn
as at February 13th, a 3-year
high. This represents a YTD
increase of 6.58%. This positive
trend continues to be
supported by strong oil and
Euro- bond proceeds.
COMMODITIES MARKET -
EXPORTS
Oil Prices
Oil prices closed at $69.65pb
at the start of the review
period after hitting a peak of
$71pb in January. However,
the rally was shortlived as
crude prices started trending
lower to a 1-month low
of $62.59 in the early days
of February before recovering
to close at $64.33pb on
February 15th. The bearish
sentiment is supported by
increasing U.S. Shale production
and a weak dollar.
The average price during the
period was $69.65pb. This is
48.19% above the 2018 budget’s
benchmark of $47pb and
28.98% above 2017’s average
price of $54pb.
Oil Production
Nigeria’s oil production declined
marginally by 0.55%
from 1.83mbpd in December
to 1.82mbpd in January.
Production remains
higher than the OPEC cap
of 1.8mbpd.
Natural Gas
Natural gas declined by
9.66% during the review
period to close at $2.580/
mmbtu on February 15th
amidst expectations of increased
production by Saudi
Arabia.
Cocoa
Cocoa prices advanced 5.8%
to $2,134/mt on February
15th, from $2,017/mt on
February 1st. The uptick in
cocoa prices is due to increased
seasonal demand.
IMPORTS
Wheat
Wheat prices gained 5.31%
to close at $4.75/bushel
despite increasing Russian
output.
Corn
Corn prices declined by
3.87% to $3.78/bushel from
$3.62/bushel during the review
period. This was driven
by improving U.S weather
conditions.
- Financial Derivatives Company
11.1%
Namibia will open its second iron ore mine after interest
shown by an Indian-controlled company called
Blake Trading, documents seen by Reuters on Friday
show. The planned mine east of the capital Windhoek
could have a potential lifespan of 40 years in a market
where mining is an important as an contributor added
11.1 percent to the country’s GDP during 2016, the Namibian
Statistics Agency says.
$14bn
Nairobi shrugged off a ratings downgrade and loss
of access to an IMF standby credit facility to raise a $2
billion bond with yield starved investors accumulating
bids in excess of $14bn for the offer.
The bond offer added impetus to recent concerns over
the rate at which Kenya is accumulating debt.
The Eurobond, the second in a span of four years, will
cost taxpayers a total of $3.2 billion in interest payments
during its lifetime of up to 30 years, according to early
calculations and the International Monetary Fund (IMF)
said Kenya needs a credible plan to tackle its fiscal deficit,
which is the main driver of borrowing.
377
Although politically troubled, Ethiopia is pressing
ahead with its aggressive privatisation policy with data
showing that since its establishment two decades ago,
Kenya has privatised a total of 377 public companies
with 96% of the payment fully settled. Out of the total
companies, 87% were transferred to local buyers. The
government plans privatise all state-owned enterprises
step by step as a strategy, says Wondarfash Assefa a
spokesman for the government.
90,000bd
Libya’s oil exports from the Mellitah terminal will slow
down after protests disrupted production at the key
El-Feel deposit for the first time in two months, putting
the OPEC nation’s crude production at risk of a decline
again and sending oil prices higher. The field has
production capacity of 90,000 barrels a day but it’s not
clear what output was before the outage.
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